The TAG Team of Kansas City North Real Estate

The KCPL Energy Optimizer

Save Energy, Money and the Environment

KCP&L's ENERGY OPTIMIZER lets you optimize your home or small business energy usage, helping you save on your heating and cooling bill, while also helping KCP&L control electricity rates. Best of all, it's easy and free.   CP&L customers with a working central air conditioner or heat pump and adequate paging coverage, can qualify to receive a FREE Honeywell programmable thermostat - a $300 value - installed in your home to start saving energy and money today! Average annual savings on heating and cooling costs can be as much as 20%, depending on thermostat settings. Where do my energy dollars go?   Take control of your energy costs Your new thermostat will put you in control of the energy you use and the bills you pay year-round. Set temperatures back in winter or forward in summer, effortlessly and automatically Preset temperatures for nighttime and times when you’re away. Set to automatically return to desired comfort levels just before you wake or return With included Internet access, the Energy Optimizer can even be programmed from the office or any remote location Energy Optimizer participants help control system peak demands during summer months. On the hottest weekday afternoons from June through September, demands on KCP&L’s system are the highest. At these times, we may either raise your temperature a few degrees, or cycle the air conditioning compressor off and on for 15-minute increments for no more than four hours. As an Optimizer participant, you're making a difference by helping to reduce the region's electric demand, thus delaying the need to invest in new generation and helping to keep our rates as low as possible for all customers. Everybody wins! Save the environment. By helping KCP&L to manage the growing demands on our system - and by being more energy efficient - you are conserving valuable energy resources for the future and contributing to a cleaner environment. APPLY today - Simply call the KCP&L Energy Optimizer Hotline at 1-866-882-4429 to see if you qualify for the program.   OR  use our online application.

Call The TAG Team today for assistance with your next move - 816-268-4444

Real Estate Investing In Kansas City

The biggest mistake many investors make is to ignore the numbers generated by their properties." Financial statements Let’s start with financial statements, or lack of them. Many real estate investors only track the results of their real estate investments at tax time. Instead investors should be reviewing their results by reading their financials on a monthly basis, or at a minimum on a quarterly basis.

I have been working with a client who always files an extension. He really never pays attention to his financial information, because it is always six months late. He just assumes he is making money and the people that are working for him are doing the right thing. He owns over 150 units at three locations. He has no way to make a quick decision. He has no idea if he is losing money or making money. Do you want to be in his shoes?

What are Financial Statements?

Typically, we assume financial statements will include:

1. A balance sheet (a summary of a person's or organization's balances. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year). This document is usually prepared by a CPA or management accountant.

2. An income statement (a summary of income and expenses) usually prepared by the investor, a bookkeeper, an investor, or a property manager.

3. An income register that includes a rent roll (summary of all collected rents and miscellaneous income).

4. Check register (list of all bills paid by check or via wire or electronic transfer)

5. A summary of security deposits (a summary of all tenant security deposits)

6. Aged payables reports (if you have aged payables, bills that have been incurred but not paid.) Typically financial statements are prepared on either an accrual basis or cash basis. In my mind (not being an accountant) I prefer cash basis. It is easier to see how a property is operating from month to month, without the numbers being clouded by budget accruals (O.K., O.K. I know I am not an accountant).

Other helpful thoughts Many people use excel spreadsheets, or QuickBooks to track property income and expenses, or if they own only a rental house, maybe just a checkbook. I recommend that you do not mix your personal expenses with your investment expenses, and that you have a separate check book for every property you own.

What do you look for? I believe you are looking for breaks in the patterns. Accounting is just a way of organizing numbers into helpful patterns.

Look to make sure all the rents have been paid.

Make sure all bills have been paid on time.

Compare the bills and rents to the trailing 12 months.

Are some of the bills out of line? In other words are the water bills higher than you expected? .

Is the insurance bill 3 times what you thought it was going to be, especially when compared to your other investments?

Look carefully at your maintenance numbers, are they in line with industry standards?

Cash on cash return

Compare your income and expenses to budget and use the variances to find inconsistencies.

How much you owe to the bank and when you have to refinance or pay off your loan?

• Current CAP rate (Sales price divided by Net operating income)

• Percent of expenses to income (this ranges from 20 – 60% depends on the property)

• What is your vacancy rate?

• How many move out notices do you have?

• What are the rent levels for units (are they within the range for the market place?) If others are preparing the reports for you, you should review monthly account reconciliations to make sure all the numbers balance.

Randomly check the check register and income register to see if someone is not siphoning money out of your property accounts. It is very easy for onsite mangers to collect rents and not send them to the central office. (This is why we have a policy that most of our rents are mailed or directly delivered to our office).

Conclusion

Many real estate investments stumble from time to time. Tracking the monthly operations is just like a Doctor checking your pulse, blood pressure and taking your temperature. You can tell a lot from the basics. You can tell early when you are running into a problem and what you need to do to restructure and improve your operational results. Reviewing and understanding your numbers will help you decide whether to keep, sell, refinance, or improve your property.

There are many standard rules of thumb. Call a local property manager and ask how they gauge the successes of your property type.

Finally, ignoring your numbers will not help you. Preparing an annual budget and reviewing your financial reports on a monthly basis are the first and second steps to insuring the operational success of your investment. Do both today. Your real estate investment success is all in the numbers.


Written by Cliff Hockley

Call The TAG Team before making your next real estate investment. - 816-268-4444

Got a question about Kansas City Real Estate - Ask The TAG Team - 816-268-4444

"Michael" wanted to know how long he can expect to sell his home in today's economy.

Kevin Kieffer, a Northern California agent with Keller Williams Realty, explained a well-priced, well-prepared and staged property can sell within weeks, longer for more expensive properties. In the San Francisco Bay Area, homes priced $500,000 and below sell quickly, but as the price increases so does selling time.

"Mary" asked if there was a way to get the $8,000 first-time home buyers federal tax credit in advance to use toward down payment and closing costs.

Allan Glass, a broker at ASG Real Estate in Los Angeles told her yes, she could, through the Independent Cities Finance Authority's short-term loan which is paid off when a qualified buyer receives his or her tax credit from the federal government.

Got a question?

Ask a Realtor.

Sponsored by the National Association of Realtors (NAR) and launched by Realtor.com, "Ask a Realtor" offers homeowners, sellers and buyers a forum to get professional answers to real estate questions from local Realtors who know and understand the local market.

"The concept is great," said Sandy Haney, CEO of the Monterey County Association of Realtors.

"Real estate is local and in Monterey County we have micro markets. We are looking to see if we can get involved in this," she added.

It's free, it's anonymous and only licensed real estate professionals do the answering.

As is the case with most question-and-answer services, the answers are general in nature, and not based on knowledge about your specific circumstances.

For information specific to you, it may be necessary to follow up with verified information based on your personal circumstances.

The answers can, however, can get you pointed in the right direction if you are buying, selling, refinancing or just troubled by some homeownership issue.

Participating San Francisco Bay Area Realtor, Kevin R.

Kieffer says, "Ask a Realtor is a great way for anyone to ask questions about our real estate market and to connect with a Realtor who has local experience and connections."

Questions can be on any real estate-related topic ranging from local market trends, mortgages and home values to buying, selling, home inspections and more.

"I like the concept. People want to gather information without feeling trapped," said Kim DiBenedetto, president of the Monterey County Association of Realtors.

"If you haven't started working with a Realtor yet, it may be a more comfortable to get your information online without being obligated to anyone," added DiBenedetto, also an agent with Coldwell Banker Del Monte Realty in Carmel.

Questions are forwarded to a local participating Realtor or to a professional specializing in the area of expertise most relevant to your question.

Answers are emailed directly to you, with some of them posted on the homepage of Realtor.com Blogs for anyone to peruse.

Questions and answers are also searchable and archived on site and listed chronologically and by subject, for future reference in the knowledgebase.

"Ask a Realtor creates an informal yet highly informative, free service for anyone interested in or involved in real estate," said Realtor.com President Errol Samuelson.

"Because homeownership is often one of the biggest investments consumers make in their lives, Ask a Realtor was developed to help people navigate real estate, establish relationships with local Realtors, and as a convenient method to ask questions that'll be answered by licensed professionals with hands-on experience in the local market," Samuelson added.

Call The TAG Team today with any real estate question you may have.  816-268-4444

Remodelers Help Homeowners Lower Heating Costs with Weatherization Programs

Winter is right around the corner and in honor of Energy Awareness Month, the National Association of the Remodeling Industry (NARI) recommends making energy-efficient upgrades as a way to prepare for the season, and many remodelers are offering weatherization programs to help them reduce energy costs. Mark of Excellence Remodeling is one such remodeling company that recently introduced a weatherization program.

"The programs are funded by both state and federal governments, and the purpose is to raise consumer awareness of the types of upgrades that are needed to make homes more energy efficient," said Neil Parsons, vice president of sales and marketing for Mark of Excellence Remodeling, West Long Branch (NJ).

Weatherization is a term to describe various improvements made to buildings and homes to optimize energy efficiency. According to the U.S. Department of Energy (DOE), on average, weatherization reduces heating bills by 32 percent and overall energy bills by about $350 per year at current prices. Through an evaluation known as an energy audit, homeowners are given a detailed report identifying problem areas in the home.

Typical energy improvements include air sealing, insulation, ventilation systems or installation of green appliances approved by Energy Star. "As consumers become aware that our energy resources are depleting and costs are rising with each year, energy efficiency is becoming a relevant topic in home improvement projects," said William E. Carter, president of NARI.

Even though each state provides slightly different programs with a variation of incentives, all of them provide the same benefits to homeowners. "Homeowners notice their return on investment instantly after making energy upgrades in their utility bills. The other benefits are the rebates, the increase in home value from making the improvements, increased performance and durability and helping out the planet by conserving energy for future generations," added Parsons.

It's important to make upgrades now because soon most of the country will be entering the time of year when most of a home's energy consumption occurs. The DOE estimates that 56 percent of the energy use in a typical U.S. home comes from heating and cooling, making it the largest energy expense for most homes.

"Most believe that remodelers are busiest during the summer, but in actuality, the busiest time is during the fall when temperatures drop and homeowners start to feel drafts in their homes and are worried about heating costs," explained Parson. Another time factor is the program deadlines.

Many state programs last until the end of the year, and energy-efficient improvements must be made within the specified time period to be eligible for rebates. To learn more about your state weatherization programs, visit dsireusa.org. However, Parsons doesn't think any of the weatherization programs will be going away for good. "Most likely, programs will be extended or modified after deadlines as the government continues to put a high premium on increasing energy efficiency," he said, adding that if homeowners are considering an energy upgrade, there is no better time than now. "Homeowners who are considering this should seek out a certified contractor that you can trust to give you sound advice about making your home more efficient."


Written by Peter L. Mosca
Call The TAG Team to schedule a time to discuss your next purchase or to sell your home. - 816-268-4444

Investment Home Buying In Kansas City

Foreclosures and bank REOs are pulling a new wave of novice investors into the market, some of whom "are just plain clueless, to put it bluntly," says Robert Cain, a long-time rental market and real estate management specialist based near Tucson, Arizona.

"They see the price and they way, wow! I can buy that house and turn it into a rental," says Cain, who lectures around the country and online about investing intelligently.

"But they don't understand the local market, they don't understand landlording, and don't even necessarily visit the property," Cain said in an interview last month with Realty Times.

For example, a property manager in Tennessee called Cain for advice recently. The manager had a simple question: "Should I fire my client?" who lives in California and purchased rental real estate 3,000 miles away in Tennessee -- sight unseen because the low price made it sound like a steal.

But the property had a long list of defects requiring costly repairs, and it was slow to rent - causing the absentee owner-investor to blame the property manager for the cash drain.

"We see it constantly," said Cain. "New investors think it's easy. They buy on emotion, on low pricing, rather than buying with a disciplined plan.

What are some of the key rules for freshman class investors? Here are a few of Cains' that have served him well since the early 1980s:

Number one: Due diligence is never optional. You've got to understand the local market - and that includes not just where prices are headed, but specific market demand for rental real estate in this price segment, and even the local government's plans for the area where you're thinking of buying.

Number two: Buy with a written plan - that's right, just like the large professional investors use, with an entry strategy and an exit strategy. How long are you going to hold onto the property, how much will it earn you during your period of holding?

And what's the endgame - a sale to another investor? Conversion to condos? Tear it down and build something that's closer to the underlying real estate's highest and best use?

"Write it all down," says Cain. That way you can analyze it better.

Number three: Calculate the actual costs of the property in advance - not just the bargain basement price, but how much you'll need to fix it and feed it - the management costs, rental commissions, vacancy costs, taxes, to name just a few.

"If you don't know these things up front," says Cain, "you are flying blind. And there are no good surprises in real estate."

Contact The TAG Team before buying your next investment property - 816-268-4444

Taking Advantage of Tax Incentives

Taking Advantage of Tax Incentives

If you're considering a major purchase like an energy-efficient home improvement or a new car, there are tax incentives available that can help you offset your costs by reducing your federal income tax liability.  

Home Improvements: Tax credits of up to $1,500 are available to taxpayers who make certain energy-efficient home improvements that are placed in service by December 31, 2010.   

The improvements must be made to the taxpayer's principal residence, with tax credits available at 30 percent of the cost - up to a maximum total of $1,500 - for the following products:

Windows and Doors

Insulation

Roofs (Metal and Asphalt)

HVAC

Water Heaters

Biomass Stoves  

There is no income limit for the energy-efficient tax credits; however, they are "non-refundable" which means you can't get more money back in tax credits than you pay in federal income taxes.  For more information on these tax credits, visit www.energystar.gov/taxcredits.  

New Car Tax Deduction: Taxpayers who purchase a new car, light truck, motor home or motorcycle after February 16, 2009 and before January 1, 2010 can deduct the state and local sales and excise taxes paid on their purchase from their 2009 federal income tax.  

The deduction is limited to taxes paid on vehicles with a purchase price up to $49,500; if you buy a more expensive vehicle, you can deduct only the taxes paid on the first $49,500 of the purchase.  

Unlike a tax "credit", the new car tax deduction reduces your taxable income - rather than your income tax due.  This deduction starts to phase out for single taxpayers whose adjusted gross income exceeds $125,000 and married couples whose adjusted gross income is more than $250,000. For more information on the new car tax deduction, visit www.irs.gov.

Remember to consult with a tax advisor regarding your eligibility for tax credits and deductions.
Call The TAG Team today to list your home - 816-268-4444

Remodeling Your Home in Kansas City

Value of Remodeling Projects Up

The value of remodeling projects nationwide increased 20 percent in the second quarter compared to the same quarters of both 2007 and 2008, according to a Remodel or Move survey of remodeling permits.

Remodel or Move said the increase followed an earlier report that identified 5 percent of homeowners who said they planned to remodel in the time period. Most of the remodeling activity was in the Northeast and the Southwest. The rest of the country hasn't seen much recovery, the survey found,

Authors of the report speculate that more people are spending money on remodeling projects because of declining costs and government stimulus payments.

Call The TAG Team for a list of recommended remodelrs - 816-268-4444

Interest Rates Remain Flat

In Freddie Mac's results of its Primary Mortgage Market Survey (PMMS) the 30-year fixed-rate mortgage (FRM) averaged 5.03 percent with an average 0.7 point for the week ending October 29, 2009, up from the previous week when it averaged 5.00 percent. Last year at this time, the 30-year FRM averaged 6.46 percent.

The 15-year FRM this week averaged 4.46 percent with an average 0.6 point, up from the previous week when it averaged 4.43 percent. A year ago at this time, the 15-year FRM averaged 6.19 percent.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.42 percent this week, with an average 0.6 point, up from the previous week when it averaged 4.40 percent. A year ago, the 5-year ARM averaged 6.36 percent.

The one-year Treasury-indexed ARM averaged 4.57 percent this week with an average 0.6 point, up from the previous week when it averaged 4.54 percent. At this time last year, the 1-year ARM averaged 5.38 percent.

"Interest rates for 30-year fixed mortgages have averaged just below 5 percent this year, which is the lowest 10-month average since the survey began in 1971," said Frank Nothaft, Freddie Mac vice president and chief economist. "As a result, refinance activity has accounted for almost seven out of 10 mortgage applications on average this year," according to Freddie Mac's survey.

"Economic data releases this week offered mixed signals as to the current state of the housing market. For example, total existing home sales jumped 9.4 percent to an annualized rate of 5.57 million homes in September, the strongest pace since July 2007, according to the National Association of Realtors®. However, new home sales unexpectedly fell 3.6 percent to 402,000 houses, the weakest since June of this year, based on figures from the Department of Commerce. Nonetheless, stronger housing demand has lowered the inventory of unsold existing homes in September to the lowest since January of this year and for new homes the lowest since November 1982, which should help stabilize falling house prices."

Call The TAG Team to get started on your next home purchase - 816-268-4444

Making Your Home Age Appropriate Creates Appeal

All of us have something in common with our homes. Sure, style, design, and location are at the top of the list, but how about age? As we age, buyers, especially the baby boomer generation, are looking to transform their homes into a place that they can stay in for as long as possible or they're hoping to find one that's already equipped for them to age-in-place.

So how old your home and you are, are reason to give some thought to if your home needs age-appropriate adaptation in order for you to be most comfortable. And, in doing so, you may actually make your home more valuable to a wider audience of buyers, should you ever sell it.

According to the National Homebuilders Association, making a home suitable for the golden years is economicaly sound. The baby boomer generation (77 million people) makes up 28 percent of the U.S. population. Assisted living for this generation can cost more than $60-thousand per year, not counting moving expenses.

That's pretty pricey. So, if you've taken some steps to make your home an age-in-place sanctuary, then make sure you highlight those renovations if you ever list your home on the market. If you haven't made any revisions, perhaps, some minor adaptations can make your home stand out and more comfortable for any age.

"People who are middle-aged and younger are also opting to use products that are safer because they see the benefits. They are choosing to use tiles that have textures that prevent slippage. They're looking for ways to make the home look aesthetically pleasing and assist them with moving comfortably into their later years," says Steve Walton, Senior Design Consultant for Marrokal Design & Remodeling.

The most common renovations involve widening hallways, making bathrooms more expansive, opening up showers, adding railings in bathrooms and around the house so that wheelchairs and walkers can easily fit. "Hallways are generally three feet which is wide enough to get a wheelchair through, but the door openings in a standard home are about two-foot-six or 30 inches wide. So those need to be widened to a minimum of two-foot-ten or three foot which is a standard width," says Walton.

Larger showers are popular and a good investment. "The universal design of a walk-in shower has mass appeal because of its convenience and easy access for all. "If you have the space, that's best; if not, then the shower has to be remodeled so that the doors are frameless. That way, there's no frame or track that sticks up and prevents the wheelchair from rolling over it," says Walton.

Textured, no-slip tiles are becoming more popular, regardless of age. Filling in sunken living rooms so that there's no change from one room to the next is also commonly requested by contractors.

Often adapting a home for an aging-in-place family is a tiered process. Homeowners start with a few things and then gradually have work done over the years. Inside the home, safety is what prompts many to take action, things like adding lighting at the bottom of the stairwell can certainly help the elderly but it's also added value for any homeowner no matter the age.

Outside the home there can also be mass appeal by removing steps and adding a gradual slope; it allows easy access for wheelchairs and baby carriages. Here's another good tip that often more modern homes already have -- levers instead of doorknobs. They are easier to open whether someone is elderly or has an injury such as a broken arm.

Yet another benefit for homeowners is that some aging-in-place remodels are considered medically necessary tax deductions. Check with your tax accountant to learn more.


Written by Phoebe Chongchua

Give the TAG Team a call to assist with your next home purchase.

Frequently Asked Questions about the Tax Credit Extension and Expansion

FAQ: Frequently Asked Questions about the Tax Credit Extension and Expansion

Here are some of the most frequently asked questions on the changes to the Homebuyer Tax Credit (from National Associations of Realtors):

Question: Existing homeowner credit: Must the new house cost more than the old house?
Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?
Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?
Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill.
The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you're within the phase out range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?
Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?
Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is "consecutive." As long as he lived in that house for 5 years straight what he did since 3 years doesn't impact eligibility.

Question: I am an eligible first time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?
Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30(or July 1, worst case), the purchaser will be eligible.

Give The TAG Team a call for assistance with buying or selling your next home.  816-268-4444